Seagate, Western Digital resumed with Hold ratings at Deutsche Bank. Deutsche Bank analyst Sidney Ho resumed coverage of both Seagate Technology (STX) and Western Digital (WDC) with Hold ratings, and price targets of $42 and $45, respectively. The analyst said in a note partially titled "Cloudy near term, Cloud is also the future" that while hard disk drive, or HDD, is a mature industry, several interesting trends have emerged. First, nearline HDDs that are suited for mass storage in cloud data centers could drive 60%+ of the industry revenue by 2022 with above industry average margins. Second, technology innovations in the next 5-10 years could continue to drive cost improvements in the HDD industry. Third, while declining NAND flash memory prices have led to rising adoption of solid state drives, or SSDs, the cannibalization focuses on PCs and mission-critical enterprise applications, while nearline HDDs appear to be more immune. The analyst concluded that "while HDD revenues appear to be on a slow decline, changing mix will likely drive better profitability."

Goldman Sachs lowers price targets on Micron, Western Digital after Asia tour. Goldman Sachs analyst Toshiya Hari lowered his price target on Neutral-rated Micron (MU) to $44 from $45 and on Western Digital (WDC) to $41 from $47 while also lowering his EPS view on Nvidia (NVDA) to $6.80 from $7.40 and AMD (AMD) to 50c from 52c following his tech/semi's-focused tour in Asia that included meetings with over 25 supply chain companies. The analyst claims that the findings and datapoints from the discussions were "mostly negative, especially those related to memory, HDDs, semi cap, GPUs, and smartphones". Hari sees the near-term server demand as "weak" with flattish Q1, and AI adoption being lower than expected in the supply chain. The analyst notes that industry participants saw AMD with continued market share gains as it launches its EPYC 2 products and the cadence for Intel (INTC) platform slowing as its upgrade cycle lengthens to three years from two. For Nvidia, the analyst also expects the ongoing inventory correction to spill into the April quarter.

Western Digital upgraded to Buy at Craig-Hallum. As previously reported, Craig-Hallum analyst Christian Schwab upgraded Western Digital to Buy from Hold, with a $59 price target. The analyst believes the time to buy cyclical stocks is after they have gotten crushed, not when the environment is positive and the industry is arguing they are no longer cyclical. Over time, Schwab would expect the over supplied flash market to normalize, for global trade tension to ease, and to gain improved clarity regarding the global macro-economic environment. In addition, longer term storage market demand is expected to see tailwinds from the secular trends of artificial intelligence, the 5G rollout, and IoT applications, he contends, adding that this should allow Western Digital to drive revenue growth within its target model range or drive annual revenue of $19B and EPS of $10-$13 within a multi-year period.

Western Digital spoke to softening fundamental environment, says Loop Capital. Loop Capital analyst Ananda Baruah says Western Digital at its analyst day spoke to a fundamental environment that has softened since its September quarter earnings call. The analyst's work indicates that NAND average selling price declines "could exacerbate entering January to a degree not discernible from" Western Digital's earnings call and that 2019 consensus earnings estimates remain too high. Further, the shares are not trading close enough to a trough price-to-earnings ratio to "provide confidence in a stock floor," Baruah tells investors in a research note. She reiterates a Hold rating on the shares with a $42 price target.

Oppenheimer reiterates Outperform, $30 target on Marvell after Q3 results. Oppenheimer analyst Rick Schafer reiterates an Outperform rating with a $30 price target on Marvell Technology Group (MRVL) following last night's fiscal Q3 results. The January quarter sales miss was greater than we expected, though margin improvement and cost control kept earnings stable, Schafer tells investors in a research note. The reduced outlook was led by storage, which is unsurprising given the recent negative commentary from storage customers Western Digital (WDC), Seagate Technology (STX) and Toshiba, says the analyst. He continues to see the "strategic/accretive" acquisition of Cavium as the upside driver for the shares.